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New Delhi: India has been steadily increasing its trade with Iran in recent years, especially in non-oil goods. In just the first quarter of Iran’s current calendar year (March 21 – June 21), India exported about USD 514 million worth of non-oil products to Iran, making it the country’s fourth-largest supplier of such goods (Tehran Times; TV BRICS). For all of FY 2025, India’s total exports to Iran stood at roughly USD 1.24 billion. Basmati rice alone accounted for USD 753 million, followed by bananas (USD 53 million), soya meal (USD 70.6 million), Bengal gram (USD 27.9 million) and tea (USD 25.5 million) (Economic Times). These numbers show how deeply linked India’s food and farm sector has become with Iranian demand.
Chabahar Port, on Iran’s southeastern coast, is at the heart of this growing trade. It offers India a direct sea route to Iran and onward to Central Asia and the Caucasus without going through Pakistan. The port’s activity has jumped sharply: in FY 24 it handled 64,245 TEUs of container traffic, up from just 9,126 TEUs in FY 23 (India Shipping News). Between FY 21 and FY 24 the total goods moved via Chabahar rose from 1.2 million tonnes to 2.84 million tonnes, and since India Ports Global Limited took over operations around 2018 the port has handled more than 450 vessels, 134,082 TEUs of container cargo and 8.7 million tonnes of bulk/general cargo (Hindustan Times). India has invested heavily here too—about USD 120 million for equipment and an additional USD 250 million in credit for infrastructure development (Reuters).
This trade route is not only about commercial goods. Armenia, a landlocked country in the South Caucasus, has been looking for new ways to connect with India for both trade and defence. According to Tasnim News Agency (Jan 2024), Armenia wants to use Iranian ports like Chabahar and Bandar Abbas to “do business with India, including defence.” Given that Armenia’s borders with Turkey and Azerbaijan are often tense or closed, the Chabahar–Iran corridor offers a rare open route to bring in supplies from India. For India, it’s a chance to strengthen ties with Armenia, deliver equipment more quietly than by air, and deepen its footprint in the region.
However, the recent removal of the US waiver that had protected India’s projects at Chabahar from sanctions (effective 29 September 2025) puts much of this progress at risk (Livemint). Without the waiver, Indian businesses and shipping partners may face higher insurance costs, difficulties in financing, or hesitation from foreign partners due to fear of sanctions. That could slow the growth of trade through Chabahar, especially for goods or equipment that require international banking and shipping services.
In simple terms, India has built up a strong network of non-oil exports to Iran and invested heavily in Chabahar to make it a gateway to Central Asia and the Caucasus. It has also been exploring this route to work more closely with Armenia. The US waiver’s removal threatens to choke off that progress. To protect the gains, India will need to negotiate, find safer financing and insurance channels, and work with partners like Armenia and Iran to keep trade flowing even if obstacles come in.